The Community Safety Partnership was planning to install the CCTV cameras in towns and villages across the area, but underestimated the cost by £600,000.

The partnership, made up of Lincolnshire county council, East Lindsey District Council, Lincolnshire police, local businesses and voluntary groups had applied for £1.3m in grants from the Home Office for the project.

But the Home Office withdrew its funding for the project after the mistake was discovered.

Stringent checks

The plan was to link CCTV schemes in Louth, Skegness, Horncastle, Alford, Mablethorpe and Sutton on Sea to one central control centre.

This would have allowed all cameras to be monitored 24 hours a day.

The district council said because the bid was sent to the Home Office at the last moment, it was not put through the usual stringent checks.

East Lindsey District Council's scrutiny panel is trying to work out what caused the mix up to make sure the same mistake cannot be made in the future.

Problem noticed

A spokesman for the council said: "When the council became directly involved in the process certain criteria had to be met.

"It was here the problem was picked up."

The council says its current CCTV schemes will not be affected.